For the old-timers on Wall Street and long-time stock investors, the incredible changes in technology and in biotech over the past 25 years have been staggering. Consider that the now ubiquitous smartphone is just over 10 years old, and widespread music and video streaming via the cloud also has happened within the same time-frame. But one major change that only a select few 20 and 30 years ago expected to see is the massive interest in the medical and recreational cannabis industry.
Jefferies was one of the very first of the major Wall Street firms to start research coverage of the cannabis sector, and a new research report raises the price target of one of their top sector picks. We also cover this week some additional Buy-rated companies that the analysts are positive on. All are solid picks for growth styled accounts with some elevated risk tolerance.
This remains a top video gaming pick on Wall Street and Jefferies is still very positive on the shares. Activision Blizzard Inc. (NASDAQ: ATVI) develops and publishes online, personal computer (PC), video game console, handheld, mobile and tablet games worldwide. The company develops and publishes interactive entertainment software products through retail channels or digital downloads and downloadable content to a range of gamers.
Shares of the gaming giant have been volatile and are down a stunning 45% from highs posted last fall. Some recent positive announcements could be meaningful for the stock to regain traction. The analysts said this after the first-quarter results were reported:
The Company reported first results that came in better than expectations, though shares traded ~5% lower initially on the second quarter guidance. We highlight that the continued strength in Call of Duty is notable, especially given the competitive launch window during the past holiday season, and note that the company announced the first 5 CoD esports franchises have been sold. That said, 2020 continues to look like the breakout year, as Blizzard continues to struggle and the content pipeline builds. Our 2020 EPS estimate remains well ahead of consensus.
Jefferies has a $60 price target on the stock, while the Wall Street consensus target is $52.75. The stock last traded at $47.15, down almost 5% on Friday.
This company has made a string of acquisitions to grow the scale of its overall business, and it also saw industry-leading sales in the first quarter. Aurora Cannabis Inc. (NYSE: ACB) produces and distributes medical cannabis products. It is vertically integrated and horizontally diversified across various segments of the cannabis value chain, from facility engineering and design to cannabis breeding, genetics research, production, derivatives, high value-add product development, home cultivation, wholesale and retail distribution.
The company’s products consist of dried cannabis and cannabis oil, CanniMed vegan capsules and hemp products, as well as sells vaporizers, consumable vaporizer accessories and herb mills for using herbal cannabis products. It also operates CanvasRX, a network of cannabis counseling and outreach centers, and it provides cannabis analytical product testing services.
Jefferies raised the price target from $12 to a $14 Canadian price target, or approximately a $10.36 U.S. The shares closed trading at $8.79 on Friday.
This could be an off-the-radar play for investors looking for a play with lower name recognition. CannTrust Holdings Inc. (NYSE: CTST) produces and distributes pharmaceutical grade medical cannabis products in Canada. It sells dried cannabis and oil extractions to the client based on the medication document provided by health care practitioner. The company has a partnership with Gold Coast University Hospital.